Ethanol Use In High Gear In Brazil

mar 19th

good question. is oil the one and only answer? india is not doing enough to explore the alternatives. although i am not sure creating large sugarcane plantations is the answer either.

why is nobody in india pursuing this or bio-diesel from plants like jatropha? because the opportunities for bribes from the arabs (and from the nuke-peddlers in america) are much greater than the opportunities for bribes from sugarcane growers and jatropha growers. simple, rational economic calculation.

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From: parr

From courant.com
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Ethanol Use In High Gear In Brazil
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South American Nation Is Decades Ahead Of U.S. As Alternative Fuel Already Powers Millions Of Cars

By ALAN CLENDENNING
Associated Press

March 15, 2006

SAO TOME, Brazil -- In an agroindustrial complex ringed by fields of 12-foot-high sugarcane, a giant mechanical claw dumps stalks by the tons into an even larger crushing machine. Here's where the renewable fuel used to power seven of every 10 new Brazilian cars gets its start.

Sugary slurry flows into a row of gleaming stainless steel distilling tanks, transforming cane harvested only hours earlier by machete-wielding farm laborers into ethanol, the alternative fuel now promoted by President George Bush to end what he calls America's addiction to imported oil.

Although Bush set 2025 as the target date for replacing three-fourths of the oil imported from the Middle East with American ethanol, Brazil already satisfies nearly half of its domestic passenger vehicle fuel demand with ethanol.

After decades of government intervention and subsidies, the industry in Sao Tome is a thriving free market business, complete with ethanol pumps at every filling station in Latin America's largest country. Millions of cars run on ethanol, gas or any combination of the two. And there's plenty more land available for sugar cane cultivation as the planet's biggest sugar producer gears up to become its long-term ethanol supplier.

Brazilian ethanol producers and international energy experts agree that the United States will probably never come close to reaching Brazil's potential as an ethanol superpower. But they say Brazil offers clear lessons about how to boost domestic ethanol use. What the United States needs most, they say, are more cars that run on the fuel, and filling stations that offer it.

"Petroleum is almost history," warned Celso dos Santos, commercial director of the Cocamar farmers' cooperative that owns the Sao Tome distillery. "People stopped using wood for fuel, and replaced it with coal. Then came petroleum, but we're getting to the end of the petroleum era."

With the sickly scent of pure alcohol wafting through the air around the Cocamar plant, a thousand workers toil around the clock during the March-to-November cane harvest season, distilling 92,500 gallons of ethanol daily that is trucked away for immediate sale at the pumps.

Sugarcane waste is burned to generate steam for the turbines, meeting all of the plant's electricity needs. Excess power will soon light half of the homes in Sao Tome, a southern Brazilian town of 6,000.

The technology is not even cutting-edge, but the industry is making profits like never before and has a bright future, thanks to a 1970s decision by Brazil's former military dictators to subsidize ethanol production and require distribution at every gas station.

A 1980s Brazilian fad with cars that ran only on ethanol petered out when oil prices fell in the early 1990s. But the fuel came back into vogue in 2003, when automakers started rolling out cars that run on gasoline, ethanol or any combination of the two. With international oil prices reaching record highs, Brazilian drivers turned to "flex-fuel" cars, buying ethanol at half the price of gas until late last year.

Some experts predict that flex-fuel car sales will reach 90 percent of Brazil's new car market within several years, while others say recent ethanol price increases could keep penetration at the current level.

Getting a fraction of that acceptance in the United States could take decades, analysts say, even with new incentives and regulations.

"Since the government does not dictate what happens in the marketplace, the process will be much slower than what Brazil experienced," said Amani Elobeid, an economist and international sugar analyst at Iowa State University.

A small but growing percentage of American-made vehicles are made to run on the U.S. version of ethanol called E85, which is 85 percent alcohol distilled from corn and 15 percent gasoline. But many American drivers don't even know that their vehicles can run on E85, and the fuel is available at only 610 American filling stations.

Brazil's state-imposed pump price for gasoline includes much higher taxes than the price U.S. consumers pay. Gas in Brazil now costs the equivalent of $4.69 a gallon. Pure ethanol - taxed at slightly lower levels and cheaper to produce - goes for about $3.59 a gallon at all of the nation's 30,000 stations. It fueled 48 percent of Brazil's passenger vehicles last year.

Meanwhile, Brazil is trying to encourage ethanol use in countries from Asia to Europe. President Luiz Inacio Lula da Silva said in Britain this week that Brazil wants "to plant the oil of the future" and promote radical changes in how the world generates energy.

Brazilian ethanol makers intent on boosting exports have been beaming ever since Bush used his January State of the Union address to plug ethanol.

"We felt that in our share price," said a smiling Paulo Diniz, chief financial officer of Grupo Cosan, Brazil's largest ethanol producer and the world's second-largest after U.S.-based Archer Daniels Midland Co.
Copyright 2006 Associated Press


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